Accounting Firm Processes

Indicated below are the processes of the Obiedo, Pua and Cabigon Accounting
Firm.
Identify Transactions
The accounting firm owners use written documents to track specific information relating
to financial transactions. These documents classify transactions and usually include
specific information regarding economic events. They also use this information to have
a historical record of business transactions. Once each transaction is identified and
classified, the information is recorded in the clients general ledger.
Record Transactions
The accounting firm record transactions (the physical process of entering financial data
into the clients general ledger). They are currently using automated accounting ledgers
in their business operations. They are also using an Accounting software which provides
business owners with an electronic process for recording transactions and maintaining
financial information. Recording transactions may require business owners to prepare
journal entries based on financial transaction documents.
Prepare Reports and Statements
The final output of the accounting firm is the preparation of financial reports and
statements. These reports and statements provide them with information regarding the
efficiency and profitability of business operations of their clients. The accounting firm
often use information to make decisions on improving operational performance. They
can also use this information to secure external financing for growing and expanding
their company.
Handling Procedures
Accounting procedures usually dictate which individuals are responsible for financial or
accounting information. The accounting firm employ several individuals to handle
financial information and move it through the accounting cycle. Handling procedures
outline who is responsible for gathering financial data and how the information will be
entered into the general ledger.
Reconciliation Procedures

Reconciliation procedures ensure all financial information is properly recorded in a

clients accounting ledger. The firm also require reconciliations when reviewing internal
financial information against vendor invoices, bank statements or other external
documents. Reconciliation procedures ensure the firm of and the financial information of
their clients are correct and financial reports include accurate and valid information.
Review Procedures
Review procedures are an important part of the accounting process of the firm. They
implement these procedures to ensure financial information prepared by their
employees are correct. The accounting firm review process may discover errors and
require changes prior to releasing financial information to their clients.
Internal Controls
Stated below are the internal controls of the accounting firm and they are sorted
into strengths and weaknesses of the accounting firm.
Strengths

They implement segregation of duties so that duties are divided, or segregated,

among different people to reduce risk of error or inappropriate actions. No one
person has control over all aspects of any financial transaction.

They document policies and procedures and making them accessible to

employees. The documented policies and procedures provide day-to-day
guidance to the staffs and continuation of duties in the event of prolonged
employee absences or turnover.

They ensure records are routinely reviewed and reconciled, by someone other
than the preparer or transactor, to determine that transactions have been
properly processed.

Weaknesses

They dont provide employees with appropriate training and guidance to ensure
they have the knowledge necessary to carry out their job duties, are provided
with an appropriate level of direction and supervision, and are aware of the
proper channels for reporting suspected improprieties.

They dont review operations to ascertain whether results are consistent with
established objectives and goals and whether the operations are being carried
out as planned.

They dont usually make sure that the transactions are authorized by a person
delegated approval authority when the transactions are consistent with policy and
funds are available, especially when receiving receipts and money from clients.

They are not that strict in handling procedures outline that is responsible for
gathering financial data and how the information will be entered into software.